Question 29(1 point)

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Consider two goods: good X and good Y. If good X has many substitutes and good Y has few substitutes, then it is likely that _____.

Question 29 options:

	The demand for good X is more elastic than the demand for good Y
	The demand for good X is more inelastic than the demand for good Y

Question 30(1 point)

Suppose Dee is an entrepreneur and the demand for the good she produces is elastic. If she raises the price, then her total revenue _____.

Question 30 options:

	will increase
	will decrease
	will not change
	may increase or decrease (not enough information to determine)

Question 31(1 point)

Consider the demand for a good illustrated by the following demand schedule. If the price decreases from $16 to $14, total revenue will _____; thus, demand between those prices must be _____.

Question 31 options:

	increase; elastic
	increase; inelastic
	decrease; elastic
	decrease; inelastic

Question 32(1 point)

Suppose that the price of good Y decreased from $18/unit to $16/unit and as a result, the quantity of good X purchased increased from 74 units/week to 80 units/week. In this case, the cross-price elasticity of demand for good X is _____. Therefore, goods X and Y are _____.

Question 32 options:

	-0.66; complements
	-1.51; complements
	-1.51; substitutes
	0.66; substitutes

Question 33(1 point)

Consider the following perfectly inelastic demand curve for good X. At a price of P1, quantity demanded _____.

Question 33 options:

	is 0 units
	Qx units
	isunits
	cannot be determined

Question 34(1 point)

A consumer's willingness to pay:

Question 34 options:

	is the maximum price that a buyer would be willing to pay for a good or service.
	is the minimum price that a buyer would be willing to pay for a good or service.
	is his or her reserved minimum bid-price.
	must always equal the seller's willingness to sell.

Question 35(1 point)

At prices above a consumer's reservation price:

Question 35 options:

	the opportunity cost is less than the benefit from having the good.
	the opportunity cost is greater than the benefit from having the good.
	the buyer will purchase the good.
	the willingness to pay is greater than the price.

Question 36(1 point)

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers was $12, then total producer surplus would be:

Question 36 options:

	$7.00
	$9.00
	$17.00
	$30.00

Question 37(1 point)

Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. Given the scenario described, if the market price of hammers decreased from $15 to $13, which of the following can be said with certainty?

Question 37 options:

	Bob's Hardware would no longer participate in the market.
	Total producer surplus would decrease.
	Only Bob's Hardware will experience a drop in producer surplus.
	Bob's Hardware would continue to participate in the market.

Question 38(1 point)

Consider the following market. Consumer surplus in this market is _____.

Question 38 options:

	$75
	$100
	$175
	Not enough information

Question 39(1 point)

Producer surplus in this market is _____.

Question 39 options:

	$75
	$175
	$200
	Not enough information

Question 40(1 point)

Government attempts to lower, raise, or simply stabilize prices can:

Question 40 options:

	shift the distribution of surplus.
	create unintended side effects.
	reduce efficiency of a market.
	All of these are true.

Question 41(1 point)

Consider the following market. If the government imposes a price floor of $5, then _____.

Question 41 options:

	there will be a shortage
	there will be a surplus
	there will neither be a surplus nor a shortage because the price control is non-binding

Question 42(1 point)

Consider the following market in which the government has imposed a price ceiling of Pc. Which of the following statements best characterize area C?

Question 42 options:

	Area C represents a transfer of surplus from producers to the government.
	Area C represents a transfer of surplus from producers to consumers.
	Area C represents a transfer of surplus from consumers to the government.
	Area C represents a transfer of surplus from consumers to producers.

Question 43(1 point)

As a result of the price ceiling, consumers lose _____, but gain _____.

Question 43 options:

	area E; area C
	areas E and F; area C
	area E; areas C and F
	nothing; area C

Question 44(1 point)

As a result of the price ceiling, producers lose _____, but gain _____.

Question 44 options:

	areas C and F; area B
	area C; area B
	areas C and F; nothing
	area C; nothing

Question 45(1 point)

A tax imposed on a good can:

Question 45 options:

	discourage consumption of the good.
	encourage production of the good.
	increase the supply of complementary goods.
	prevent the market from reaching an efficient equilibrium.

Question 46(1 point)

If the government places a tax of $0.50/unit in each market, which market will have the most deadweight loss?

Question 46 options:

	Market A
	Market B
	Not enough information

Question 47(1 point)

Who actually benefits from a subsidy to sellers?

Question 47 options:

	Only consumers benefit from any kind of subsidy.
	Only sellers benefit, since it is their subsidy.
	The benefit is shared depending on elasticity of the supply and demand curves.
	None of these statements is true.

Question 48(1 point)

Consider the following market. If the government imposes a subsidy of $14/unit, then government expenditure will be _____.

Question 48 options:

	$1,440
	$1,880
	$2,016
	None of the above

Question 49(1 point)

If the government imposes a subsidy of $14/unit, then deadweight loss will be _____.

Question 49 options:

	$95
	$120
	$168
	None of the above

Question 50(1 point)

The minimum wage is an example of a _____.

Question 50 options:

	price ceiling
	price floor
	tax
	subsidy